Sovereign Wealth Fund: If Nigeria were Malaysia

Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed. Photo: TWITTER/FEDERALMINISTRYOFFINANCE

By Geoff Iyatse (Asst. Business Editor)

In 2016, the US Justice Department filed a complaint alleging that over $3.5 billion had been misappropriated, between 2009 and 2015, from 1Malaysia Development Berhad (1MDB), a sovereign wealth fund (SWF) created by the government of Malaysia to promote economic development. The figure reported stolen was later revised upwards to $4.5 billion even though the department believed the actual value might have exceeded that amount.

It was looted by the fund officials and their associates in government and laundered through a web of complex financial transactions with banks in Singapore, Switzerland, Luxembourg and the United States actively involved.

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The Malaysia fund was not managed by a ‘fly-by-night’ entity but by the famous Goldman Sachs. Its staffers were later indicted for failure in carrying out due diligence, looking the other way while state officials pilfered the common purse or played active roles in the scandal. After years of persecuting those indicted in the stealing that would become the most notorious Malaysian and one of the biggest financial scandals, Goldman Sachs, last year struck a deal with the Malaysian government for a $3.9 billion settlement.

The 1MDB scandal is a lesson to different countries with SWFs, including Nigeria. Nigeria and the Asian country have shared socio-political traits, including the rich history of official craft and high tendency to grease the wheel.

But while Malaysia has continued to improve in its transparency culture in public business, Nigeria sinks further into its legendary corruption mire, which manifests in the Transparency International Corruption Perception Index where it ranks 149th compared with Malaysia’s 57th position.